At the time of writing the current Chancellor of the Exchequer has announced a raft of business support initiatives, to help keep workers in jobs and businesses continuing.
These measures are immediately welcome, but can be a legal minefield for Company Directors and employers alike, and could store up later problems with HMRC, the Insolvency Service and Employment Tribunals at a later date if not handled properly.
VAT PAYMENT HOLIDAY
it’s a DEFERRAL - this quarters VAT payment can be deferred until June 2020 ( though there is a suggestion that it maybe be deferred for up to six months )
It does not mean that the VAT debt is going away and the debt will remain.
Do you really need to defer this debt,? Think carefully before making this decision, because it could store up issues with HMRC at a later date.
Alternatively, how can you maximise this opportunity for the benefit of your business?
Interest-Free loans for 12 months.
This situation is far from clear, at times the Chancellor has indicated that business owners should initially approach their banks for lending and if that fails they could apply for such a loan.
Again as a Director of your company, you have a raft of responsibilities to the company and it’s shareholders that you must fulfil, which you may find will be scrutinised at a later date by receivers, amongst others.
COVID 19 JOB RETENTION SCHEME
The government wants to stop employers/business owners from sacking staff, and have promised a scheme whereby they will guarantee up to 80% of an employees salary. This scheme will be in place by the end of April 2020 and will be backdated to March 2020. It will be administered by HMRC, in the form of grants payable to the business which will then be paid to its employees.
The first issue about this is that HMRC are not prepared for such an immediate and mammoth task to be put in place so quickly ... they too have been badly hit by over 10 years of austerity and have suffered huge staffing cuts.
Don’t expect this money to come flooding through, there will be delays, mistakes made with the payments etc.
What do you do in the meantime, when waiting for these payments?
Do you make your staff redundant, only to face an employment tribunal at a later date because the redundancy process that you executed is accused of being unfair, or because you should have waited for these payments to made by HMRC?
What should you do now?
We are all facing a completely unprecedented situation, the best advice is to take immediate advice and put together the best accountancy / legal team that your business can afford and can give you, your company, co-Directors, shareholders and investors the optimum chance to survive and thrive.
It will be worth the investment of time, energy and money.
Take advantage of the time and the ‘ breathing space ‘ that the government is offering, deal with the immediate issues now and plan for the future ahead, which is undoubtedly going to be difficult, but not impossible to navigate.
How can we at Lewis Nedas law help you and your company?
Having been established as a successful business for over 38 years, we know what it takes to steer a company through difficult economic times, led by Jeffrey Lewis the firm boasts first-rate teams offering advice upon Contractual, Company / Commercial, Employment, Dispute Resolution ( across all areas ) Insolvency , Property /acquisitions/sales ( including those of distressed assets )Property disputes / Regulatory ( SRA / HMRC / Directors Duties ) Settlement agreement, legal issues.
We pride ourselves upon our ratings/rankings in the leading legal directories, our Google reviews, our agile, multidisciplinary responsiveness and our most importantly, our results
We price our services at mid-market rates, which are highly competitive, and we can offer either fixed fees or attractive fee packages to assist you.
We can deal with any issue remotely during this era of social distancing eg dial into board meetings, and work closely and effectively with accountants and other specialist professionals to help you through this.
Contact LEWIS NEDAS LAW
Tel: 0207 387 2032